What It Means to Be Middle Class Today

Being middle class isn't what it used to be. That isn't so surprising, of course. Everything changes. One hundred years ago, you were considered middle class if you made $577 a year, according to TheCostofLiving.com. Today, many people make that much in a week. At least, according to the Bureau of Labor Statistics, the median weekly earnings of full-time workers for the first quarter of 2014 were $796.

But just what is middle class today? There seems to be a lot of evidence out there that the status of middle class is almost the new poor. To wit, in recent weeks:

-- Country Financial, an insurance and financial services firm headquartered in Bloomington, Ill., released a survey of about 3,000 Americans last week. Known as the Country Financial Security Index, the survey has been measuring Americans' sentiments of their personal financial security since 2007. The survey suggests that most people (59 percent) believe it isn't possible or are no longer certain that it's possible to live a middle class existence and be considered financially secure.

-- The National Low Income Housing Coalition released a report last month stating that affordable rent is becoming harder to find for many households across the country. It found that a full-time worker needs to earn $18.92 an hour to afford a two-bedroom rental without spending more than 30 percent of income toward rent. (Thirty percent is considered the most one should pay for housing, if you want to manage your money responsibly.)

-- The Pew Research Center found that the number of people who consider themselves middle class has fallen almost a fifth, from 53 percent in 2008 to 44 percent in January. Could that be good news? Maybe more people now consider themselves wealthy? Probably not -- in February 2008, 25 percent of people referred to themselves as lower-middle class or poor; now that number is 40 percent.

All of this can make anyone wonder: How much income do you need to make to be considered middle class? Is it something to aspire to, or considering how expensive it is to live, should we pity the middle class today? And is middle class the new poor?

We asked a handful of academics and financial advisors for their thoughts.

There is no universally recognized definition of middle class. There are federal poverty level guidelines, so if you happen to wonder if you're poor, you can consult the Department of Health & Human Services (not that you likely need guidelines to tell you if you're poor). But after that, you're on your own to decide if you're lower middle class, middle class, upper middle class or in the fabulously wealthy territory. But to get us started thinking about financial status, a U.S. household with four people living off $23,850 or less is considered poor. (Hawaii and Alaska, with higher costs of living, have different guidelines.)

One helpful yardstick to judge whether you're middle class: Median household income was $51,017 in 2012, according to the most recent U.S. census data. Robert Reich, a professor of Public Policy at the University of California-Berkeley and former Secretary of Labor, has suggested the middle class be defined as households making 50 percent higher and lower than the median, which would mean the average middle class annual income is $25,500 to $76,500.

If you're in the middle of the middle, however -- not lower or upper-middle class -- that would be an income range between $39,764 and $64,582, says Aaron Pacitti, an assistant professor of economics at Siena College in Loudonville, N.Y.

Again, it isn't official. Nobody gets a membership card to the middle class.

But everyone wants a card. Whether they belong there or not. Jerry Love, who runs a certified public accountant firm in Abilene, Texas, and works with the middle class and the fabulously wealthy, says he has clients earning $300,000 to $400,000 annually who nonetheless consider themselves middle class. He adds that those clients usually reference themselves as middle class when they find out their tax rate.

"'But how can that be? We're just middle class,' they'll say," Love says. "It's the tax law that brings them to the realization that they're doing better than the average American."

But there's really another reason even the rich enjoy identifying themselves as middle class, suggests Kate Ratcliff, a professor of American studies at Marlboro College in Marlboro, Vt. It's Hollywood's fault. "The reality created by the commercial mass media is one in which everyone is middle class. Advertising, television and movies all convey a world in which middle-class affluence is an American birthright," Ratcliff says.

Why the rich often see themselves as middle class. Another reason the wealthy sometimes think of themselves as middle class is that they can always point to someone better off than them, Love adds. "It could be that to the extent that there are people in America like Bill Gates, Ross Perot, Mitt Romney -- I think many wealthy people use that as the standard: 'Well, I'm not in that group -- and if I'm not in that group, I must be the middle class.'"

Pacitti says there's actually some logic to those who are wealthy and feel poor compared to the super-rich.

"As you work your way up the income ladder, inequality grows," he says. "If people make $104,096 per year, which puts them in the richest 20 percent of the population, they feel 'relatively' poor because they compare themselves to people in the top 1 percent of the income distribution -- people making over $500,000, but primarily millionaires."

Pacitti explains the difference between a true middle-class household, bringing in $51,017 a year, and someone in the top 20 percent, which starts at $104,096, is $53,079. "[It's] not that wide of a gap," he says. "But the difference between someone earning $104,096 and a millionaire is $895,904 -- a difference nearly 17 times as great."

"It almost feels like we're seeing a lot of Willy Lomans, like there's maybe the death of an American dream," says Joe Buhrmann, referring to the famed play "Death of a Salesman." Buhrmann is the manager of financial security support at Country Financial, which sponsored the survey in which 59 percent of respondents said it isn't or may not be possible to live a middle-class existence and be considered financially secure. "In my mind, though, that flies smack in the face of a lot of good news that we're hearing about the economy, with continued improvements in the job market, housing and the stock market," he says.

But it may be that being middle class seems like more of a struggle than in previous generations, in part because how we define middle class is different. Perhaps our expectations are higher.

"I think we've somehow lost perspective in what we consider middle class," says Theodore Sarenski, CEO of Blue Ocean Strategic Capital LLC, an investment management and financial planning firm in Syracuse, N.Y., who also worked 20 years at a small accounting firm. So Sarenski has encountered many rich -- and not-so rich -- clientele. He didn't grow up wealthy -- or at least by today's standards.

"I grew up in a family of four kids, and we lived in a small house and had one car, which Dad took to work every day," Sarenski says. "One car, one TV and one phone, and if you think of what people have in their homes today -- a TV in every room, everyone has a cellphone -- we've gotten to expect more and more, and we're struggling with that."